Gambling Commission make “unprecedented” error in ongoing £200m lottery case

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The UK Gambling Commission (UKGC) have made an unprecedented mistake in the current £6.4bn legal battle for the National Lottery contract.

It is believed that they have accidentally handed over 4,000 sensitive documents to lawyers acting for media tycoon Richard Desmond in their current legal case.

Northern & Shell (N&S), the investment group owned by Desmond, is suing the UKGC for £200m in its handling of the lottery licence award process.

The regulator awarded the 10-year licence to the Czech-owned operator Allwyn in 2022, rejecting a bid from Camelot, and a third proposal from Desmond, who previously owned the Daily Express and a range of pornographic publications.

N&S previously rejected a £10m settlement with the Gambling Commission in December last year.

This leads us to the trial that is set to go ahead in October, at the High Court, despite warnings from the Commission that any resulting payout may have to be taken from lottery money allocated to good causes.

This past Wednesday, during a procedural hearing, it emerged that the Commission had made what has been described as a “huge” error during pre-trial disclosure, the process where the two factions hand over relevant information to each other.

The Commission, represented by London-based law firm Hogan Lovells, is understood to have accidentally handed over more than 4,000 sensitive documents about the lottery process directly to lawyers representing N&S.

The gambling regulator wants the court to order the return of some of the documents, but is understood to be unsure of exactly what the documents they handed over were, something that they have been trying to find since before Christmas.

They have asked for a six-week extension to go through the process, but Judge Jefford has granted them until next week.

She described the error as “extraordinary” and “unprecedented” and ruled that the regulator must pay N&S costs sustained as a result of the hearing.

There is no guarantee that the judge will rule that the documents must be handed back or redacted, with a new hearing scheduled for early March.

The Gambling Commission and Hogan Lovells both said they could not comment on an open case, while N&S declined to comment.

Desmond launched an initial high court challenge in 2022, driven by a desire to show transparency in the process governing the award of the contract. 

In June, the Gambling Commission had been said to find it would be “astonishing” if Desmond’s claim was successful, accusing him of trying to have a “second bite of the cherry”, trying to earn a second windfall.

The award of the fourth National Lottery licence wrested control from Camelot from the first time since the beginning of the weekly draw in 1994, with the handing over to Allwyn being the first change in 30 years.